Bloomberg Audio Studios, podcasts,

radio, news.

Bloomberg Tech is live from coast to

coast with Caroline Hyde in New York and

Ed Lelo in San Francisco.

>> This is Bloomberg Tech. Coming up,

OpenAI link stock slump after the Wall

Street Journal reported that the company

failed to meet its own sales and user

targets.

>> Plus, a jury has been selected for the

trial between some Alman and Elon Musk,

who claims OpenAI abandoned its founding

mission. Arguments begin today.

>> And late night host Jimmy Kimmel has

defended comments he made that prompted

President Trump to call for him to be

fired. We head to Hollywood for the

latest.

>> First, we head to these markets, Ed, and

they are under pressure. Yes,

geopolitical tensions still loom large

and we think a lot about Iran and the

straight of four moves, but we also

think about what's currently happening

in the sell-off related to techn by one

and a quarter percent on the NASDAQ 100

worst day in a month. Why? You're going

to get to those details. It's all open

AI related. Yep. Look at this board.

These are the Soft Bank USlisted shares

that have tens of billions of dollars of

exposure to Open AI. Coreweave, clear

neocloud exposure to Open AI. Oracle the

primary infrastructure partner for open

AAI. The journal reporting that OpenAI

missed its own metrics financial ones

for 2025 and contemporaneously Caro the

user number is not where they want it to

be. It's not. And this is all reporting

from the Wall Street Journal. We want to

dig into that with Bloomberg Tech editor

Seth Figman. What is the biggest anxiety

for investors? Is it that they're not

yet at a billion users and had been

hoped by investors thus far? Is it more

the revenues that aren't hitting

internal targets? What is it about this

reporting?

>> You know, I'd say probably more the

revenue side of things. Ultimately, this

company is still growing pretty fast,

but if they fall short of their own

expectations, even by a modest amount,

it might affect the wider AI ecosystem.

As a reminder, as we've reported, OpenAI

has increasingly set itself up at the

center of this complex web of

investments from chip suppliers uh and

cloud providers. And if it has to reduce

in any form its commitment to

infrastructure spending, it could have

ripple effects for the wider AI

landscape.

>> I'm just going to go through what the

journal reported. Chat GPT missed its

annual revenue target in 25. It missed

its internal fullear revenue goal and

then for 26 monthly revenue targets are

behind. And the big one probably is the

billion figure for chat GPT users. again

all Wall Street Journal reporting and I

note that in that story there is a

pretty strong statement from both Sarah

Fry the CFO and CEO Sam Alman what what

what what's the logic here of why we see

all these stocks react it's just their

partners or what?

>> Yeah, I think that they're partners and

ultimately if OpenAI has to rethink the

hundreds of billions of dollars that it

plans to spend in the next 5 to 10 years

on data centers and chips that could

have ripple effects for a lot of these

partners. Now I will say Ed, you alluded

to some push back here. We're also

hearing directly from OpenAI in a

statement that they're saying their

business is firing on all cylinders

quote end quote right now with strong

growth in their nent advertising efforts

on the consumer side as well as with

their enterprise product. Now they're

not spelling out their financial

details. Neither is the Wall Street

Journal.

>> All of this though puts the question of

the IPO in the balance as well and just

the rush to be able to raise more funds

publicly. Does that matter in this

context particularly if we are seeing

that there it questions whether they're

going to be able to finance that going

forward for more compute.

>> I think it certainly matters in probably

a couple different ways. One, if their

business is not where they want it to

be, that's going to add pressure for

them to maybe delay a little bit longer

before going public. But two, if the

question here is why are they not where

they want to be, it seems likely that

it's because of the pressure they're

facing from Google and Anthropic, the

lagger of which also wants to go public

as soon as this year. So, if it's facing

off against a possibly ascendant rival,

that's going to make it even that much

harder to pitch Wall Street.

>> So, for part of the OpenAI story and in

the Wall Street Journal's reporting and

others reporting is this concern that

Sarah Frier has. Revenues aren't growing

at the same pace that justifies all the

spending. And when you're going to IPO,

that's a bit worrying if you're going to

put that in front of investors. What do

we know in that standpoint? Yeah, I mean

look what this company has publicly said

is I think last year they were around $1

13 billion in revenue as of February

after they announced the mammoth funding

round. Uh they said that they were

generating $2 billion in revenue a

month. So you can do the math there.

It's still a fast growing company but in

order to justify $600 billion in infra

spending which is what they've said you

need to be growing a bit faster than

that. And Sam Alman has previously

sounded quite bullish on the prospects

to grow this business quite fast up to

you know hundred billion dollars in

revenue in the coming years. If that's

going to happen at a slower pace, they

might need to rethink some of their data

center buildout plans.

>> Bloomberg, Seth Figerman, thank you.

Bloomberg Intelligence out with the

react senior tech analyst Anaragana

writing that if open AI sales were to

miss as reported by the Wall Street

Journal, it could have an impact across

the entire AI infrastructure ecosystem.

Anar joins us now. What's so interesting

about this like the market's response is

oh, we actually now do need evidence of

demand, right? we know about the

infrastructure spend that data we've got

what we don't have is what's coming out

the other side how are you computing

that

>> so when we look at the entire uh cloud

infrastructure demand I mean that still

remains very solid whether that's

transferred from openai to anthropic

that is the big story that we are

discussing here is whether this promise

that openai has made to Oracle to Amazon

to Microsoft to core you know how good

is that promise over the long term and I

think that's the contention point but

frankly if If you were to put that

aside, the demand for cloud

infrastructure remains extremely strong

right now and partially driven by

anthropic and all the the coding tools

that we have seen over the last 6

months.

>> What's so interesting is coreweave have

come out with a statement from a

spokesperson saying all we see is more

demand than there is supply when it

comes to compute right now. That exactly

leans into where you see Anorak. So if

there was one player pulling back,

there's immediately enough demand to

fill that supply.

See for somebody like Corvid absolutely

they can backfill it with because they

have agreements with Meta they have

agreements with Microsoft. So I mean

given their scale it's not a big deal

and I would say the same thing for both

Amazon and Microsoft because they have

enough backlog coming from other places.

The the thing is over here Oracle is the

one where OpenAI has the largest

commitment which was $300 billion plus.

Now the this is where you would see that

how will that number shape up in the

coming years. You know, I would argue

that even if things were really fine

with OpenAI and there were no changes,

um there could be some transfer of that

demand from Oracle to potentially

Amazon's web services because when

OpenAI and Oracle signed that deal,

Amazon was not in the picture. Amazon

recently got included in the in the pie

and they s and you know, OpenAI made a

100 billion plus commitment with them.

So, you know, if if they're going to cut

back somewhere, I think the the my gut

instinct is it's going to come more from

Oracle than anybody else.

>> And we see the share price reaction in

Oracle today, of course, along with

everyone else. Anorog, can I just go

back to one area that has been reported

is that OpenAI had turned to its own

investors saying the reason we can stay

ahead and perhaps fend off competition

like an anthropic is we've got more

compute. Is that a winning formula for

these LLMs right now?

So that is the traditional mindset that

the more compute that you have the

better your model is going to be. Um so

far that trick has been working in a

sense that mod that concept of u uh you

know you could say scaling laws have

been working. Um I just don't know how

that shapes up in the next iteration of

model and how big of a clusters do you

need to train them

>> and Ragana out with the react out with

the Bloomberg intelligence. We so

appreciate it. Let's get broader market

perspective now. Tiffany Wade's here

with us. Columbia Thread Needle

Investment Senior Portfolio Manager.

It's interesting how much the market

reacts to this particular reporting. Is

there reason to have anxiety that

companies are good for the compute

demand right now? I think we're going to

see that the compute demand continues to

persist. There's so much demand and it's

not just from anthropic and open AI.

It's really across the economy that

we're seeing demand for more processing

power. So I expect the spending is going

to continue. But I get why we're seeing

some of the stock reactions on a news

report like this uh es especially across

the tech and the semis where these

stocks have been up you know almost 40%

over the last month. So it kind of makes

sense that we're seeing them take a

breather on a big bit of a negative news

report. Um but I don't think that we're

going to see that the story for

infrastructure uh you know spaying

demand has cracked. Tiffany, I'm right

in saying that um Alphabet, parent of

Google, is one of your your top

holdings, one of your top names, right?

>> Yes.

>> What we've looked at is obviously the

chaos in the moment. There's a big move

in in the session, but this is a longer

term chart and it shows that Alphabet

exposed stocks have massively

outperformed OpenAI exposed stocks. We

can get into the different definition of

but each, but what does that chart tell

you about your own thesis and conviction

on Google? Yeah, I think we're seeing

the divergence here in the charts really

happen according to the competitiveness

of the models that have been released by

both companies, right? So, Google for a

while was being perceived as a bit of a

loser uh because their models were maybe

not as good as what we were seeing come

out of OpenAI uh and Anthropic and that

changed last year uh when they released

some of their newer Gemini models and

then they were seen as more of a winner.

Um, and I think that caused some of that

divergence uh and the performance

between those those baskets of stocks

that are linked to Google and that are

linked uh to open AI. And certainly this

continues to sort of push that narrative

around how competitive are Open AI

models versus uh the competitors.

>> Let's bring it back to today's top

story. Stocks that have an association

with OpenAI are selling off pretty hard

on the basis that the journal reported

it missed prior year financial targets

internal and it's still not where it

wants to be on chat GBT users. It seems

like now we do need some more evidence

of demand on a longerterm basis. We're

not just focused on the the capex input.

Is that where your your head's at,

Tiffany?

>> I think that's right. Uh I don't think

the demand overall is slowing. We're

seeing amazing numbers coming out of

Anthropic. they've taken up their

revenue targets significantly over the

course of the year. There could be a

couple things that are causing uh OpenAI

to grow a little bit slower and and part

of it could be that they're losing a bit

of market share to Anthropic. Uh

Anthropic with their uh cloud code

product has been a massive hit so far

this year. OpenAI was a couple months

behind in releasing their codeex

product. uh their exclusivity agreement

with Microsoft may also have been a bit

of a headwind to uh enterprise adoption

but yesterday that uh agreement was

renegotiated. So we might see some more

opportunity for open AI on some of the

other cloud providers as more models

become available elsewhere. So I think

we might see some of those proof points

around the growth uh given just you know

having the ability to uh sell this

codeex product across more platforms and

also the ability to sell their models

across a wider array of models across

AWS and then also across the Google

cloud platform

>> and that proof point comes in earnings.

I mean we're all just holding our breath

for this week to really see how much

capital expenditure continues to come

from these mega players. Yeah. Well, I

don't think we'll know the answer for

OpenAI specifically this week, but we'll

certainly see if the demand continues to

hold up. I think we'll be watching very

closely to see the revenue growth and

potentially continued sort of

acceleration in revenue growth for the

cloud services providers and then also

what they have to say about capex plans.

It's likely that we'll continue to hear

the companies say that they're capacity

constrained, which may lead to increased

capex expenditures for the year.

>> Tiffany, let's put the academic side of

this to one side. AI is developing. AI

is potentially good for the world. This

is Bloomberg. We do business. So what's

the metric by which we set the world

order of who is leading in the field?

Open AI, Anthropic, Alphabet, Meta, XAI.

How do you establish a rank?

>> I think some of the things we're looking

for is certainly user growth when we're

thinking about the model providers. So

at the moment it seems like Anthropic is

leading. Also their you focus on

enterprise demand has clearly been a

benefit for them versus open AI shifting

demand towards enterprise or their focus

towards uh enterprise later on. And then

for the cloud providers, we're really

looking for that acceleration uh in the

revenue for the cloud businesses as an

indicator that demand continues to grow

and that they're starting to generate

some good returns off of the spending

that they are uh committed to.

From your perspective, the hardware you

are you open this up by saying no wonder

we perhaps get a pullback because the

market has run so high, but is it for

2026 hardware wins, infrastructure wins,

software is still at play and still an

anxietyridden space right now? I think

we're going to see that continue to be

the playbook for the year. I wouldn't be

surprised if we took a little bit of a

breather on some of the semiconductor

stocks. I mentioned they're up almost

40% over the last month, so potentially

quite crowded here going into the rest

of earnings. But I think that that

narrative probably continues for the

rest of the year where we're seeing very

good demand, very good backlog for all

of the hardware companies and these

questions continue to linger about sort

of the business model for for software

and SAS companies.

>> Tiffany Wade of Columbia Fred Needle. Uh

it's been a robust, timely, and very

useful conversation. Thank you very

much. Now, coming up, President Trump is

once again criticizing late night host

Jimmy Kimmel and calling for him to be

fired. We're going to have the details

of that next. In the meantime, President

Trump is speaking in Washington where

he's welcoming King Charles III at the

White House. Let's listen in.

>> Where the two great leaders met was

called the Prince of Wales, the very

title that his majesty the king held

longer than any other individual in

British history, and he held it with

great pride and respect.

It said that when Prime Minister

Churchill first met this future king

many decades ago, he was so impressed.

He made the statement, "He is so young

to think so much and so well."

And the bust of your great prime

minister rests proudly again in the Oval

Office. We're very proud to bring it

back. We brought it back.

Throughout his majesty's life, the world

has witnessed that same thoughtfulness

which first struck Britain's greatest

prime minister. His majesty's intellect,

passion and devotion

have been long really a long a blessing

blessing to the British people

but not only to his own country but to

the cherished bond between the United

States and the United Kingdom. And I am

very certain that it will continue that

way long into the future.

In a few hours, his majesty will stand

in the heart of the United States

capital as the very first British king

ever to address

a joint session

of the United States Congress. So, he's

going to be addressing

Congress and I'm going to be watching.

I was thinking of going, but they said,

"I don't know. That might be a step too

far. I would love to go.

It's not supposed to be protocol, but I

would love to be with you.

But there the direct descendant of King

George III will speak to the direct

successor of the very body that gathered

in Independence Hall in July 4th, 1776.

If John Adams and George Washington or

the King's fifth greatgrandfather

could see that site, they might be

absolutely shocked, but probably only

for a moment. Surely they would be

delighted that the wounds of war healed

into the most cherished friendship.

Think of that very, very

long ago difficult war. And yet those

wounds did indeed heal into the most

cherished of friendships. Most

cherished.

They would be moved beyond words to know

that the soldiers who once called each

other red coats and Yankees became the

Tomies and the GIS who together saved

the free world as brothers in arms and

brothers in eternity. And nobody fought

better together than us.

if they could see us today.

I agree that hateful and violent

rhetoric is something we should reject.

I do. And I think a great place to start

to dial that back would be to have a

conversation with your husband about it

because um

by the WAY

I also should point out Donald Trump is

allowed to say whatever he wants to say

as are you and as am I as are all of us

because under the first amendment we

have as Americans a right to free

speech.

Jimmy Kimmel there defending a joke he

made last week that prompted President

Donald Trump to call for ABC to fire the

late night host. Let's get the details

on this latest fight between Kimmel and

the president with Lucas Shaw who leads

our screen time team out of LA and

Hollywood.

Where do we start, Lucas? I mean uh

there is a chronology to what happened

over the last seven days, but the the

net result is that the president has

called for Jimmy Kimmel to be fired.

Yeah, I mean we um we've it feels a

little bit like deja vu which which uh

Kimmel talked about on television last

night. It was it was you know six months

ago give or take I think it maybe seven

where um you know the the the

chairman of the FCC Brendan Carr

President Trump were calling for Kimmel

to be fired by by Disney and ABC or

calling on stations to come after

Kimmel. Um, but that's one of the big

differences this time versus last time

is, you know, Disney reacted very

swiftly in part because some of the

biggest local station owners, which

carry the kind of ABC on their on their

local networks, were asking for Kimmel

to be fired or asking for him to be off

the air because of comments he'd made at

the time regarding Charlie Kirk, right?

>> Um, you know, this time they they aren't

doing that. They've been pretty silent.

Lucas, in October, um, after that first

dispute, uh, you had an extended

conversation with Kimmel on stage in Los

Angeles at our screen time event. For

the Bloomberg Tech audience around the

world that may not understand this,

right? They don't necessarily know Jimmy

Kimmel. They may, they don't understand

why the president is so engaged over

what Jimmy Kimmel has to say, just give

us the basics of of his show, its reach,

why this is happening. Look, Jimmy

Kimmel uh hosts one of the three of main

late night talk shows on American

Broadcast TV. You've got the show on CBS

by Steven Colbear, which is about to go

away. You've got the show on NBC hosted

by Jimmy Fallon and then Kimmel on ABC.

You know, he is not known or at least

for most of his career was not known as

a political comedian, but over the last

several years has gotten far more

outspoken on politics and has been a

really frequent thorn in the side of

President Trump. Trump does not like to

get made fun of and is is someone who

still cares about late night television.

And so they've had sort of public

jousting again and again. And I think

this time, you know, Disney didn't take

Kimmel off the air. Kimmel was not, you

know, he he is finding a way to

consistently tweak the president while

also trying to, you know, not cross the

line as he has done in the past.

>> Kimmel did say he was sorry for what

Trump, the first lady, and everyone at

the dinner. This is a White House

correspondence dinner went through but

question whether really the joke was in

any way relationship to then what

occurred over the weekend. That is the

context here. Lucas, how do we see

therefore maybe any Brennan car comments

coming further? Do you anticipate are

you bracing yourself for any further

reaction?

>> Look, you made a crucial point which is

that Jimmy Kimmel made a joke that we

can debate whether or not it was in good

taste or not, but it was made prior to

the incident at the White House

correspondents dinner over the weekend.

So, it's not like he was making light of

that situation because the the comments

were were edgy. They have been

weaponized by the Trump administration

once again to show that Kimmel is kind

of a is a is a bad guy. Is it possible

that FCC and and that the FCC and

Brendan Carr come after Kimmel or more

specifically come after Disney and those

ABC station licenses? Kind of anything

is possible. Brendan Carr has behaved in

a manner that is unlike any FCC chair

before. Um but I don't we don't know yet

what they're planning to do.

Lukash as always across it. We

appreciate you. China is moving from

regulation to intervention in an

unprecedented geopolitical power play.

Xi Jinping is attempting to block a meta

deal that has already closed. Newberg's

Peter Elstrom has more on Beijing's move

to exert extrterritorial influence over

Silicon Valley. Is that how it's being

seen? Peter, I'm really interested in we

understand how Meta and Manis yesterday

we covered why that deal might be being

getting pushed back from China, but how

does it affect other companies that have

been born in China and moved elsewhere?

>> Well, China for a long time has been

able to exercise these regulatory powers

that are far beyond what you would see

in other countries. We know of course

about their crackdown on Jackman,

Alibaba, and the Ant Group, for example.

Probably the closest thing to what we're

seeing right now with uh with Manis is

when DD the ride hailing company,

they're listed on the New York Stock

Exchange and then actually had to

reverse course and pull its listing. And

so what they're trying to do here is

quite similar in a lot of ways. They're

trying to go to Meta even though it's

already closed this deal and get them to

undo the acquisition of Manis. It's not

clear how that would happen. As we

talked about yesterday, the money has

already been distributed to the

shareholders of Manis. It's not clear

whether they can get those checks back

and actually return them. And it's also

not clear how they're going to undo some

of the technology sharing that we've

already seen. Uh Manis has already

shared a bunch of their technology with

Meta at this point. So it's not clear

that you can actually undo this and what

it would mean to actually undo it at

this stage of the process.

>> There is a case study mirror mind.

Peter, correct me if if I haven't uh

said that right, but this is a business

that has a US component and a Chinese

component. And we've reported that the

founder has looked at the mana situation

and said, "Okay, I'm taking action in

light of the the latest policy position

from China." That's that's right. Yeah.

And this is a sign of how Chinese

entrepreneurs are entrepreneurs with

their roots in China are now being very

careful about this geopolitical divide

between China and the United States in

particular. So in this case, you said it

exactly right. It's Mural Mind. This is

a founder Chen who was famous for

starting a games company called Shanda.

He's decided that he needs to quarantine

the Chinese business and the US business

from each other. They've set up um uh

strict uh uh restrictions between those

operations to make sure that they don't

share data, they don't share code

between the two operations. They can run

them uh separately at this point. And I

think that's a sign more broadly for

these Chinese entrepreneurs who are

starting up a bunch of very very

interesting uh companies within uh the

country at this point. Some of them in

the past have looked to move to

Singapore to perhaps distance

themselves. That's actually what Manis

tried to do. But it's not clear that

that's going to work unless you go to go

to Singapore separately, start up your

company separately there and then don't

leave anything behind in China.

>> So it's a tricky situation overall for

these entrepreneurs. Bloomberg's Peter

Elstrom who's the executive editor

leading our coverage of of Asia Tech.

Thank you very much.

>> Welcome back to Bloomberg Tech. We check

in on these markets which are under

pressure. NASDAQ 100 having the worst

day in a month at the moment as big tech

pulls back and we'll get into the

reasoning around that. Number one key

stock that's on the downside. Of course,

European born but US traded Spotify off

by 12% having its worst day since 2023.

This after earnings come in lackluster

according to Bloomberg Intelligence

second quarter gross margin forecast

implies a very modest expansion from the

fiscal first quarter. And they say it's

going to fuel concerns that AI music is

taking market share. Let's talk more

about AI because that is what's seeing

tech under pressure today. Not the

geopolitical overhang, but what's

happening with OpenAI reporting from the

Wall Street Journal that it's missing

internal targets for growth on user base

for growth on revenues and it tugs down

the ecosystem that surrounds OpenAI.

Oracle its infrastructure player down by

4%. ARM holdings with its relationship

with SoftBank up by more than 8%. Gven

Nova, even the electricity

infrastructure that's meant to be going

into future compute, it's down by 5%.

Ed, this is a broad reaction. Okay,

Bloomberg's equities reporter Carmen

Reini is with us. I mean, how broad,

right? You know, we've looked very

closely at Oracle and its exposure to

Open AI, the Neocloud's Core Weave, an

obvious example. Car touched on power.

Does it go beyond that in the market

this morning?

>> Yeah, I mean, I think we're seeing kind

of any stock that's really linked to

Open AI under pressure this morning. And

really, the reason behind that is that

there's concerns that they're not

meeting these targets. are they going to

be able to meet the sort of myriad of

commitments that they've made with other

companies through all the the deals that

they have? It's really bringing back

those fears around circular financing

that we saw kind of at the beginning of

the year and investors have maybe

started to overlook a little bit um as

maybe they've shifted to you know

looking at capex and return on

investment for some of this AI spending.

So we're seeing really broadbased

pressure here. Um, it's also important

to note, I think that Open AI linked

stocks have underperformed those linked

to Alphabet. So, that's the other thing

here. There's just more competition in

the space overall that's putting

pressure on OpenAI. Um, and investors

are really taking note of that. Car,

it's interesting that OpenAI have come

back forcefully in own statements to

Bloomberg saying they're firing on all

cylinders. What's interesting is our

cylinders going to be firing in earnings

coming up later this week that just show

where the capital expenditure is there

whether more broadly the compute story

is there even if it's being reshuffled

around some of the LLMs.

>> Yeah, definitely. I think investors were

already looking at these reports coming

up especially all the hyperscalers on

Wednesday with a high level of scrutiny

and I think this raises the bar right

we're looking at capex we want to see I

think that spending is still happening

but any pullback would be an issue and

then on the flip side the return on

investment like what these companies are

seeing from all this spending is just

going to be paramount

>> what next carbon I mean uh it's weird

but for the first 32 minutes and 30

seconds of the show, we haven't

mentioned that there are trillions and

trillions of dollars of market cap

reporting earnings imminently and that

could turn the entire tech market on its

head.

>> Exactly. I mean, we have a huge slate of

reports that are coming up later this

week. I mean, Wednesday again, we get

the four biggest hyperscalers. We get

Apple on Thursday. Qualcomm's in the mix

as well. So there's so much money, you

know, in the market coming from AI

that's tied to AI and we're going to get

results from these companies this week

and investors have been reacting very

strongly sort of pricing in either the

very best case scenario or the very

worst case scenario I think as we can

see today with how the market these tech

stocks are moving. So these these

reports coming up are going to be so

important and they're going to swing you

know the entire market. So, we're really

just waiting to see what what happens. I

think it's an 82nd spread on Wednesday

that we get four of the biggest

companies, you know, on in the AI story

reporting. So, it's going to be it's

going to be a really fun day.

>> Brace brace Ricky. Thank you very much

indeed. Look, let's turn to other OpenAI

news right now making headlines today. A

jury has been selected for the trial

between the AI firm and Elon Musk who

claims that the company OpenAI abandoned

its founding mission as a nonprofit.

Arguments begin today, but regardless of

the outcome, Bloomberg opinion reporter

Dave Lee says it's a win for Musk. Dave,

you're with us now. And in many ways, is

it the distraction

>> that ends up winning for XAI and Elon

Musk here?

>> Right. I think if you're Elon Musk,

you're looking at open AI and thinking

there's a competitor that reduces uh

Musk's own chances of capturing more of

the AI market. We know SpaceX is looking

to go public very, very soon. Um, and

XAI, the AI company, is part of that.

Um, and what this case is doing at the

very very least is is is putting a a

cloud over OpenAI's own efforts to go

public themselves. You know, as this is

overhanging them, there's a chance if it

really goes against OpenAI that they'll

have to unwind their for-profit business

and go back to the nonprofit structure

that they originally set up in, which

Elon Musk says he's seeking to create.

OpenAI, of course, say, you know, Elon

Musk is being disingenuous. he wants to

be rich from AI as well. He was behind a

for-profit restructuring for Open AI and

that this is just a ploy to slow them

down. Well, it's a ploy that is already

working uh and could get more effective

uh depending on how uh the court ends up

ends up seeing it.

>> Okay. The title of your column is Open

AI is shedding baggage. Now, it needs a

jury's help. Dave Lee, what baggage?

Just be a bit more specific.

>> Where do you begin? I mean, look, we've

seen today this issue of of having user

and and revenue growth issues, but one

of the things that's been uh affecting

Open AI recently is this idea that it's

doing too many things and that it's and

it's some of this deal making has tied

it in knots. So, for example, on Monday

uh we saw that Open AAI had renegotiated

an already renegotiated deal with

Microsoft over compute over access to

frontier models. That's a good bit of

baggage to get out of the way because it

it brings some clarity to their deal

with Microsoft which has kind of gone

sour over the last uh couple of years.

Uh other baggage includes what the

company was calling Side Quest. So we

saw it close down Sora, the video app

that was kind of popular but was really

expensive to run. Didn't really seem to

have much in the way of um generating uh

enough revenue to make it worth it for

OpenAI. These are all little things that

Sam Orman, I think, in his sheer

enthusiasm to try and do everything and

now as the company prepares for an IPO,

seen as uh distractions, seen as strains

on the balance sheet, you know, this is

a company that's going to show that even

though uh it's going to be losing money

for quite some time up until at least

2030 is the projection. They've got to

be shown to be reigning in some of those

costs to at least be heading in the

right direction. The biggest bit of

baggage or one of the largest bits of

baggage I should say is this trial

though which is why as I said they need

they need a jury's help with some of

this.

>> Well they've got the jury they have

opening statements. In fact Sam Alman

and Greg Brutman were at the court

yesterday which was a surprise to some.

We are expecting a lot of other previous

and current OpenAI executives to take

the stand. Right.

>> Yeah. I mean what open AAI has been a

soap opera in Silicon Valley. You had

Sam Alman forced out briefly back after

a weekend. You've had staff leaving

starting their own companies. Anthropic

of course is one of those. Mera Morati

has started her own company. She was uh

formerly open AI. Having some of this

laid out on the stand is going to be

wonderful for people like us. I feel

it's going to be very uncomfortable for

some of those really sort of at the

center of this. There's a lot of egos

here. There's a lot of um you know uh

bad blood I think between some of these

former colleagues. Um but that's what

happens you know when you're at the

center of what for the last couple of

years I think we can say is one of the

most exciting and talked about companies

in the world. So uh plenty to enjoy and

we've got a couple of weeks a few weeks

of it to uh to enjoy starting today.

>> That was that is Bloomberg opinion

columnist Dave Lee. We haven't worn him

out just yet. Now coming up on the show

space startup True Anomaly raises a a

new funding round, a big one as it aims

to speed up production of its orbital

defense tech. We're going to talk to the

CEO next. This is Bloomberg Tech.

True anomaly. It's close to $650 million

series D funding round, valuing the

company at 2.2 billion. Now, the space

startup is among a dozen companies

recently named to work on interceptors

for the Golden Dome Missile Defense

Shield as well. True Anomaly CEO Evan

Rogers joins us. It's been a busy few

days.

>> It's been very busy. Let's focus on the

funding round first. Where do you deploy

that capital? What really injects the

growth for the business?

>> We we're really stepping up alongside

Guardians in the Space Force. The the

Space Force budget in FY27 is expected

to be 72 billion. That tells you a lot

about the kinds of capabilities the

United States Space Force needs to build

to counter China and Russia. We are

investing in the staff and the products

uh and the infrastructure that's

necessary to come alongside Guardians to

build combat capability for space

warfare.

>> Let's talk about your products. what

makes you unique, distinct, and additive

to the others because it's ferocious out

there in the world of defense tech. It's

a really hot space.

>> So, I served 10 years in the Air Force

and then transitioned into the United

States Space Force. And what I saw from

the defense industrial base is a focus

on dual use technologies. And there's

good reason for that. But because space

is now a war fighting domain, it's very

clear that the operational concepts for

space warfare necessitate dedicated

space war fighting systems. They have a

completely different performance

envelope than commercial capabilities.

They're quite literally going to get

shot at. And so our focus is on clean

sheet design to deploy operational

concepts into the domain. So Jackal, for

example, uh our first product is a clean

sheet space-to-space engagement

platform. It's not designed to do

anything else other than protection and

surveillance of the domain.

Evan, we're very excited about this

domain, right? Space is a warfighting

domain, the technology you're doing, but

I'm going to try and bring it back down

to earth a little bit for the Bloomberg

tech audience. So Jackal, you mentioned

it's a highly maneuverable vehicle. It

moves around other satellites in orbit.

Explain the basics of that. Right. Our

audience are tuning in and going, "Okay,

so space is a war fighting domain. You

make vehicles that are in space and it

moves around other satellites. Take it

from there." That's right. Our our

adversaries deploy into orbits that we

don't necessarily have capabilities in.

For example, geocynchronous orbit, which

is 22,000 mi from the surface of the

Earth, is a long way for a groundbased

telescope to be able to really

characterize what our adversaries are

doing. So, we need systems that have the

maneuverability, the fuel, the

acceleration to be able to chase those

targets down and take pictures of them.

The first the foundation of combat

capability is intelligence. And so, the

first order of business is to really

understand what our adversaries are up

to in space. And Jackal is purpose-built

to go after highly maneuverable targets.

>> Evan, who who's the counterpart to true

anomaly? Does China have a company or a

competence in the same domain um that

you think about?

>> China doesn't have necessarily a company

that's focused on space war fighting,

but their entire military-industrial

complex is blended with their commercial

uh their commercial uh manufacturing

infrastructure. So everything that China

does really for civil or for or for

commercial has military applications and

we're starting to see that particularly

in their intelligence platforms. China

over the last several years has deployed

about 1,300 spacecraft into low Earth

orbit. About 500 of those are

intelligence platforms. Those

intelligence platforms are designed to

track terrestrial forces. So maritime

forces, aviation systems, and and ground

capabilities. So there's really it's

very difficult for the United States to

maneuver globally without China seeing

where we're going.

>> Let's talk about the United States a bit

because you build exclusively from I

understand for the United States

government. Will that expand? Will there

be others that you want to serve here?

>> Right now we focus on the United States

because that's where that's where the

problem is and also where there are

substantial budgets focused on space

superiority. But we're starting to see

our allies build the rhetoric and build

the policy to support space war

fighting. The UK, France, Japan in

particular, really leaning forward into

space war fighting. They have their own

dependencies on space capabilities. Um,

but the budgets need to follow. We're we

are happy to partner with our allies,

but but the budgets are really not

following and there's a focus on

nationalized capabilities. The budgets

have been there, but some would still

say perhaps the spending on smaller

companies by the by the Pentagon still

somehow needs to be shown a little bit

more. Are you really confident that the

spending will be there for you? Are you

I mean already you've been announced on

Friday to be part of Golden Dome.

>> There there is a shift in the way that

the defense department or rather the

department of war is acquiring systems

and it really biases and creates an

opening towards new companies like True

Anomaly. They're focused on firm fixed

price contracts, capital partnerships,

long-term contracts that allow for a

rational ROI. And that's an opening for

True Anomaly to step into that gap and

deliver capabilities. And we're truly

unique in the marketplace. I mean, spa

space war fighting is the one of the

most rapidly growing areas of investment

for for the Department of War. 40

billion this year in in spending, 72

billion this year, 20 billion of which

is in space control. is the highest

growth market and we're stepping in.

>> Evan Rogers, CEO of True Anomaly, $650

million series D, $2.2 billion

valuation. Thank you very much. All

right, Carrick, some news headlines.

>> Yeah, it's time for talking tech, Ed.

First up, Hong Kong is betting on Light.

Shares of Light Intelligence skyrocketed

384% in their trading debut today,

giving the company a market value of

over $10 billion with heavy backing from

Alibaba and TESC. The firm is aiming to

revolutionize AI inference by using

light instead of electricity to process

data. Plus, Eli Liy is turning to

artificial intelligence to design the

next generation of medicine. The farmer

giant has inked a deal worth up to 2 and

2.25

billion with AI startup Proffluent to

find new ways to edit DNA. But the deal

is part of Lily's growing investment in

AI and the company has struck at least

15 AI related deals in the last 5 years

according to Bloomberg Intelligence. And

manifest OS is the quote AI native law

firm just closed a $60 million series A

at a $750 million valuation. The

platform aims to help small firm lawyers

automate the grunt work and shift

towards outcomebased pricing. Look,

their mission is to make legal services,

immigration, tax, for example,

accessible to all through AI. Investors

include Menllo Ventures, Kleiner

Perkins, and First Round Capital.

>> Shell is entering what CEO Sawan calls

an inflection point. The company agreed

to buy Canadian oil and gas producer Ark

Resources for 13.6 billion, its biggest

deal in more than a decade as it seeks

to sustain output in the long term.

Joining us now from London is Shell CEO

Wild Sawan. The obvious question is why

Canada and why now? But the way that a

lot of people are looking at this while

is is the geopolitical bet on on safe

safe energy supply. How much were you

thinking about that?

Um I'd start off by saying actually this

is just an important point on the

journey that we have been on a journey

that started over three years ago where

we said we want to methodically

transform the company and that's what

we've been doing and so the inflection

point came that as we continue to

deliver performance discipline

simplification in Shell we felt that it

was time to look at more and more

capital reallocation and we felt that we

had earned the right to be able to grow

and so the announcement yesterday for

ARC was uh essentially just a step in

that in that journey that we have been

on. Uh we had been looking at ARC for

over two years and so that of course

predated the Middle East crisis. Um I've

particularly been attracted to multiple

elements of of ARC. I mean first and

foremost this is a liquid rich play

highquality resource uh low cost long

duration in a terrific basin like the

Montiney basin with low carbon intensity

molecules. And so we like that piece of

it. We like the synergies, the the

adjacency to our own assets and the

integration into LNG Canada, our LNG uh

uh project in Canada there. And then

thirdly, we really like the people. We

like the culture that they had developed

over 30 years. And so this this well

predated the crisis, but of course

always helpful to be able to have a

diverse sources source of supply to meet

the growing energy demands around the

world. So a growing demand does that

mean you have a growing production a

growing supply into the 2030s with this

additive deal while

>> absolutely so uh we had in the past

guided to a 1% uh uh keer growth between

now and 2030 for our oil and gas

production on the back of this deal we

have guided to a 4% peranom kager so a

significant uh uh growth uptake between

2025 and 2030 but importantly as well it

gives a long duration growth platform.

It allows us to add 150,000 barrels per

day of liquids out in 2035. And the

inventory we're talking about is well

above 15 years of inventory into up to

25 years in certain areas. And so this

is just an exciting growth platform that

is underpinned in my mind with the

liquids opportunity, but also with

significant optionality for the gas

through our existing plant and possibly

through a second phase of that

development that we have in LG Canada.

>> We will talk more about this deal, but

it's been about 10 years since I last

attended an OPEC meeting, and this is a

massive story, the UAE leaving OPEC.

What's your reaction to that? But I

think more importantly, what do you

think it will do to global oil markets?

>> Yeah, difficult to call. I mean, very,

very early days. And of course, I'll

leave it to the UAE leaders and to OPEC

to opine on it. What I would say is, you

know, OPEC is roughly a third of the

overall liquids production of the world.

Um, and and undoubtedly demand for

liquids continues to grow and and I mean

by that oil, condensate, and so on and

so forth. Um the the most important

influence of OPEC has typically been in

who has the spare capacity and how do

they choose to deploy that spare

capacity. And so that will be I think

the calculus that will have to be made

in the coming in the coming weeks,

months and and years. For a company like

ours, of course, our focus has been on

indeed diversifying production. we have

production in OPEC countries and nonopc

countries, but also importantly

continuing to make sure that we look at

new horizons to be able to grow our

production. And that of course we do

through both expiration and M&A deals

like what we've done for example here in

in Canada. And so I think at the end of

the day uh what will be important will

be supply demand balances. We know that

those are going to be tight for at least

the coming months if not at least the

next year plus given the closure on the

in the straits. The question will be

longer term how does all that pan out

and I think that's too soon to call at

the moment.

>> What was the environment that you closed

this deal in? How tight are global

energy markets right now? We're thinking

a lot on this program Bloomberg Tech

about energy security but Asia and

Europe it's hard to gauge the severity

of how real a supply crunch is.

the markets are tight. Um I I won't I

won't uh play it down at all. You know,

we're talking about 900 million barrels

that have not been produced in the last

couple of months and that's been

replaced by essentially stock draw down.

We're now sort of starting to reach some

some relatively low levels. We're

talking about demand curtailment in

certain areas. We're talking about fuel

switching. So this is this is profound.

Um and not just for oil by the way uh it

also plays in of course for LG. 20% of

the global LNG production comes from uh

from the Middle East. And all this is

happening with the backdrop of sustained

growth in energy demand of which to your

point Ed some of it is being of course

contributed to by the growth in AI and

technology demands.

>> Exactly.

>> And so it is it is indeed a tight

situation. Um and this is why it's

incumbent upon uh us the energy sector

to continue to invest in all forms of

energy to make sure that we are able to

provide that energy uh to support

multiple countries as they're looking to

both uh grow in in their own uh in their

own consumption of energy but also those

that are looking to underpin their their

AI and technology journeys ahead.

>> So while should investors expect more

M&A coming from you?

Look, this, you know, we've always

talked about the bar for M&A being a

high bar, and I absolutely hold on to

that. Um, this this deal crossed that

high threshold that we had. We didn't

need to do this deal, by the way, for

avoidance of that. We were very

comfortable being able to meet our uh

commitments out to 2030 and potentially

to continue to methodically add

resources to our overall funnel. This

deal worked out perfectly because of the

arbitrage in where share prices were. We

we got uh uh the bumps because of our

outperformance recently and of course

some of the the tailwinds from the

Middle East. ARC didn't have the same

simply because of the the nature of

their portfolio. So so this worked

because of that. Uh the timing was was

excellent and and I think we got a good

deal for both sides. Uh but but that

high bar is is going to be held high

again and we will only deploy capital to

M&A if we really find excellent deals

like this

>> and that was in that methodical context.

What isn't methodical is geopolitics and

what's happening in the straight of

Hormuz. Have you managed to get any of

your ships through the straight? How

what is your exposure right now while

>> No, we continue to have multiple ships

there. Uh actually I have a a call

scheduled tomorrow with one of the uh

crews on the ships just to check in on

them. Uh it's a tough time. It's a tough

time for our people. Our number one

priority is the safety of our people. Um

and and we await uh the the appropriate

signals to be able to move those ships

out. Um, you know, as as I said, we're

trying to focus on on keeping morale

high. Uh, and and many uh here in in

headquarters and well beyond across the

Shell family are looking at everything

they can do to be able to meet our

customer demands, which which of course,

you know, are those demand levels

continue to be high, but we're we're

running at roughly 15 to 20% less

molecules than we were just 2 months

ago. And so, you know, I I I I just

continue to be incredibly proud of what

everyone in the company has been doing

to be able to to contribute.

>> Well, Sawan, Shell, CEO, really grateful

for your time here on Bloom Tech. Thank

you very much, Gary. Yeah, that does it

for this edition of Bloomberg Tech.

Really folding in there what is a need

for electricity, a need for energy

because the key story is one of compute.

Now today's story is all about open AI

and questioning from the Wall Street

Journal whether they're living up to

their own growth aims and targets.

>> Yeah, the Journal reported that they

missed their own internal metrics. And

it was interesting you pointed out

earlier some of their electricity stocks

literally fell as well. That's part of

the calculus. A lot to recap from this

show. You know where to do it on the

podcast, online, Apple, Spotify, iHeart,

on all the Bloomberg platforms as well.

2 days into a massive week. Stay with

us. This is Bloomberg Tech.